NEW ORLEANS – A federal judge has approved a new method of calculating BP oil spill payments for certain types of businesses.
The change affects thousands of so-called variable profit businesses – mostly law firms, accountants, construction companies and farms that spend their money on an item or project but derive revenues from it at a wholly different time of year.
The new calculation method means that related revenues and expenses will be matched, instead of just comparing the business’ revenues and expenses in a three-month period before the spill with the same three-month span after the spill.
“The purpose of the thing was to try to match corresponding expenses with revenues,” said Patrick Juneau, the claims administrator who initially paid claims based on the same three months, but was forced to change the policy when BP appealed. “And to do that it may go beyond a three month period of time or a four month period of time, and it’s a real complex task to do that.”
Juneau’s new matching policy is 80 pages long, and he says implementing it will involve complicated changes to software.
Some plaintiffs’ lawyers complained that Juneau went too far in changing the policy after BP won its appeal. They were hoping that Judge Carl Barbier would reject Juneau’s new process, but the judge approved it as-is Monday evening.
“There may be those who agree or disagree with it, and I respect their right to do that,” Juneau said. “But I’m just telling you, it was strictly generated to conform with whatever the court’s directive was.”
Even after the changes are implemented Juneau may not be able to resume payments to variable-profit businesses because all business claims are on hold while BP pursues a separate appeal at the 5th Circuit – this one involving whether business claimants must prove that their losses actually stemmed from the spill.